Feb. 1, 2015


HE Francisco Rivadeneira

Ecuador

HE Francisco Rivadeneira

Minister of International Trade, Ecuador

BIO

Francisco Rivadeneira graduated in International Relations and specialized in international economics, political science, international trade, economic and legal integration, conflict resolution, and negotiation. He has attended prestigious centers such as the University of Geneva, the Graduate Institute of International and Development Studies in Switzerland, Universidad Andina Simón Bolívar, Pontificia Universidad Católica de Quito, and the University of Barcelona. After that he served on several public and private entities, including the Ministry of Foreign Affairs and Human Mobility of Ecuador, the Export and Investment Corporation of Ecuador (CORPEI), and Citibank. He has been professor of international economics, international trade, economic and legal integration, and international relations, among others at Pontificia Universidad Católica de Quito, Universidad San Francisco de Quito, Universidad Andina Simón Bolívar, and Facultad Latinoamericana de Ciencias Sociales (FLACSO).

Ecuador recently concluded its negotiations for a trade agreement with the EU. What is the significance of the agreement for Ecuador?

The negotiation of a trade agreement with the EU concluded in July 2014, after nine rounds of negotiations from bloc to bloc. The process started in 2007 together with the Andean Community countries. The result of this process is an agreement that meets the needs of Ecuador in relation to access to the European market and the protection of sensitive domestic production sectors. Ecuador requested special and differential treatment due to the size differences of the economies; Ecuador is more vulnerable to international prices due to its dollarized economy. Undoubtedly, the negotiations represent a win-win scenario.

Do you feel that the EU has been receptive to providing special and differential treatment, which acknowledges the different challenges Ecuador will face?

We feel the EU has been receptive; however, its first option was to negotiate an association agreement. In addition to bilateral trade talks, the EU also maintains agreements between specific trade blocs and, as such, negotiations for an agreement between the EU and the Andean Community was initially proposed. Unfortunately, due to the fact that we could not carry out this negotiation in a mutual manner as a bloc, Ecuador decided to continue unilaterally. The primary objective is still the same; however, this agreement deals not only with trade, but development in general, as well as helping regional economies and creating welfare.

Do you see it as something positive that Ecuador is negotiating an agreement on its own rather than as part of a bloc?

Every bloc negotiation has its positive and negative aspects. When you secure a trade deal as a single country, it is adapted to meet the specific needs of that state. As a bloc, the interests of some countries are sacrificed for the good of the group. On the other hand, it is notably better to negotiate as a bloc, because you have more power and influence in the negotiation process. In that respect, during these negotiations, we have certainly gained in terms of certain specific interests for Ecuador, but we have also lost some negotiating capacity.

What is the current importance of trade with the Middle East, and specifically the UAE, and what role do you see it playing in the future?

Currently, our trade with the Middle East is not very significant. However, the importance of this region lies in its potential for greater opportunities. The Middle East has enormous consumer capacity, especially in regard to our products, and there is a significant market demand in this region for high-quality products, which Ecuador can provide. The market demand for food exports is particularly high, due to the lack of capacity that many Middle Eastern countries have to grow local crops. Countries like Ecuador can provide high-quality food products, year-round. There is also huge immediate potential for Middle Eastern countries to invest in Ecuador, as the country provides a strong, structured option for countries seeking to diversify their risks following the financial crisis, which made a significant impact on much of the Western world. Ecuador can fill this portfolio gap, primarily because of its political, economic, and social stability. The country has developed interesting high-value projects in both the public and private arenas. We are working to incentivize countries like Qatar, Kuwait, and Saudi Arabia to invest in Ecuador's energy, physical infrastructure, telecommunications, food, and industrial sectors. It is also worth mentioning that Ecuador is looking to utilize the city of Dubai as its main economic hub for the Middle East and nearby regions, such as Africa and India.

How is Ecuador responding to the suspension of preferential access to the US trade market?

The US market will remain a crucial partner for Ecuador, and we are keen to increase investment opportunities between the two countries. Ecuador has opened four trade offices in the US located in New York, Miami, Chicago, and Los Angeles, and the country is looking to open another office in Houston, in 2015. The possibility of negotiating a trade agreement with the US does exist, and Ecuador has a significant interest in this; I made this point quite clear in meetings with the US government in 2013. The real question lies in what type of agreement this will be. In our previous experience negotiating with the US, we found that many times the asymmetries between itself and its negotiating partners are not properly taken into account. It negotiates as if other countries are on the same level, which is unacceptable. If the US is willing to take Ecuador's unique economic situation into account, then negotiating a new trade agreement could be an option.

How will the Trans-Pacific Partnership (TPP) affect Ecuador, considering that the country is not participating?

Ecuador is well aware that the Asia-Pacific region is the most important area in the world today. It is also the most strategic, because the countries that will exhibit the highest growth rates in the coming years are found in this region. Ecuador is also a part of the Pacific Rim and, as such, participation in any process related to developing economic trade in this region is important for the country. We are examining whether we should integrate ourselves into Asia-Pacific Economic Cooperation (APEC), an organization that helps to create a type of economic synergy among regional actors. However, for the moment, we have decided not to officially take part in this forum primarily because, from a trade perspective, the region is too liberal. This does not mean we aren't keeping up with what is happening with this mechanism, in fact, we may seek to become part of this agreement in the future. If the TPP comes into force, Ecuador will re-evaluate its role in this forum; however, I am not optimistic about the outcome because interests are quite varied at this moment.

What are your key priorities for Ecuador's trade policy over the coming years?

We hope that the conclusion of the agreement with the EU will help our country close other pending deals and lead to negotiations for agreements with Canada, the European Free Trade Association (EFTA), Turkey, and South Korea. In Latin America, we are in the process of finishing negotiations with El Salvador and Nicaragua, and are commencing negotiations with the Dominican Republic and Honduras. We also hope to reach a more comprehensive agreement with Mexico in the near future, and we are working to finalize and sign an agreement with Venezuela in 2015. Ecuador is also launching a powerful campaign next year to improve the country's image by promoting various sectors, including tuna, shrimp, and flowers. We want to boost our exports in terms of both value and volume; however, this requires a change in our export tendencies. Finally, our goal is to increase foreign investment into the country.

The past few years have not been positive in terms of multilateralism in world trade. Is the future of international trade going to be in bilateral agreements?

The position of the Ecuadorean government is that multilateralism is the best option. We believe in the WTO and its purpose. Unfortunately, the reality is that it is extremely difficult to reach result-oriented agreements in the WTO. The last meeting in Bali was more successful than Doha in reaching certain trade agreements, but was still not sufficient.

What role should international trade play in developing the Ecuadorean economy?

The role of international trade is essential in developing the economy. When you have a dollarized economy, there are only three ways of bringing in currency: debt, foreign investment, and exports.

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